The FERDI program was developed in 1993 to promote federal tax compliance among current and retired federal employees. The program incorporates the purpose and intent of Office of Government Ethics regulation 5 CFR Part 2635.809 which addresses the responsibility of federal employees to "satisfy in good faith their obligations as citizens, including all just financial obligations, especially those such as federal, state or local taxes that are imposed by law" .

5 CFR Part 2635, Standards of Ethical Conduct for Employees of the Executive Branch.

IRM 1.2.1.6, Policy Statements for Collecting Process Activities, related to this section include:

The Director, Collection Inventory Delivery & Selection is responsible for overall FERDI policy, procedures and delivery.

Automated Programs analysts are responsible for development of FERDI policy and procedures.

Campus employees who handle FERDI accounts are responsible for following the procedures in this IRM.

The following Collection Activity Reports (CAR) containing FERDI data are available to assist with program management:

Operational and program reviews are conducted to ensure that cases actions are in accordance with the procedures in this IRM.

FERDI taxpayer accounts are identified by a "federal" indicator on IRS systems. See IRM 5.19.18.2 for additional information.

FERDI includes taxpayers currently receiving a salary or annuity pension from the Federal government. Taxpayers receiving survivors’ annuities are excluded.

Federal employees or retirees are defined as:

The most commonly used acronyms used in this IRM are shown below.

Additional acronyms can be found in IRM 5.19.1-1, Acronyms, Explanations and Command Codes for IRM 5.19.1.

Employees will refer to related sections of IRM 5.19, Liability Collection, as directed in this IRM.

Employees will refer to related sections of IRM 25.1.11, Campus Collection Fraud Procedures and IRM 25.1.11-1, Fraud Indicator Check Sheet, as directed in this IRM.

Additional helpful information can be found on the Servicewide Electronic Research Program (SERP) website.

If the taxpayer contact indicates that they are a federal employee/retiree and there is no FERDI indicator present, input the indicator to IDRS CC ENMOD with Transaction Code (TC) 971 Action Code 051.

On joint balance due assessments, input the indicator on the primary SSN if either the taxpayer or spouse is a federal employee or retiree.

Once a year, FERDI indicators are systemically removed from accounts of taxpayers who are no longer federal employees or retirees. This is accomplished by matching FERDI taxpayer records (both the primary and secondary SSN for joint entities) against federal sources to identify those individuals no longer employed, or in the case of retirees, deceased. In order to systemically remove the indicator, both the primary and secondary SSN must not match the federal sources. Master File processing generates a TC 016 with DLN 38263-995-00100-y, (where "y" is the last year digit of the year the DLN was assigned) which removes the FERDI indicator.

During telephone contact, if the taxpayer informs you that they are not a federal employee, take the following actions before removing the FERDI indicator:

When working inventory, you may remove the FERDI indicator without taxpayer confirmation or contact in the following instances:

If your research confirms the taxpayer's claim, input TC 972 Action Code 051 to IDRS CC ENMOD to remove the FERDI indicator. Input history code "OADT,21,PN97251" .

Form 12412, Operations Assistance Request (OAR), for FERDI taxpayers will be assigned to S7 and worked by ACS Support (ACSS).

ACSS employees will follow procedures in IRM 5.19.6.20.7.

When OAR processing is completed, assign the case to F1.

If TAS requests a hold on the account move the case to S7 pending receipt of the OAR.

When working cases with identity theft issues, follow procedures in IRM 5.19.21.

Identity theft cases in the O1 inventory are worked by ACSS. When ACSS processing is complete, cases will be moved back to the originating F inventory.

Assign Form 12153, Request for Collection Due Process or Equivalent Hearing, or any written request for CDP or equivalent hearing received from FERDI taxpayers to S8.

When CDP processing is completed, move the case to F1.

FERDI correspondence cases are assigned to the F9 inventory and worked by ACS Support (ACSS).

FERDI cases can be identified by the literal "FE" on the ACS entity screen and/or "Federal Employee" in the Alerts section of the AMS summary screen. See IRM 5.19.18.2 for additional ways to identify FERDI cases.

When screening incoming mail, follow procedures in IRM 5.19.6.11, ACSS Clerical Procedures for Incoming Mail. Substitute F9 for any reference to S4.

Follow procedures in IRM 5.19.6.18, FERDI - F9 Inventory Processing, when processing F9 inventory. Substitute F9 for any reference to S4.

The intent is to find a physical address and/or phone number and contact the taxpayer, or to locate the taxpayer's assets and secure any unfiled return(s). If a levy source is found, proceed with collection.

If the taxpayer is in the military and there is no Combat Zone freeze on the account, then issue a levy. Make sure the levy is sent to the correct address based on the taxpayer's status and branch of service. For taxpayers with an APO (Army Post Office) or FPO (Fleet Post Office) address, if necessary, check the following Department of Defense website to determine if the taxpayer is currently in the military on active duty and their branch of service: Department of Defense Servicemembers Civil Relief Act (SCRA).

If there are no levy sources, research CFOL, TRDBV and ACCURINT for a new address, phone number and assets.

Issue OL16 or OL 26 to the most recent potential new address.

Make a Notice of Federal Tax Lien filing determination. Do not file a Notice of Federal Tax Lien unless a physical address of assets within the United States has been identified. See IRM 5.19.4.6 for Notice of Federal Tax Lien filing procedures.

If no address, phone number or levy source is found proceed with normal closure actions.

Under the Affordable Care Act (ACA), the Federal government, state governments, insurers, employers and individuals are given shared responsibility to reform and improve the availability, quality and affordability of health insurance coverage in the United States.

Starting in 2014, the individual shared responsibility provision calls for each individual to have minimum essential health coverage (known as minimum essential coverage (MEC)) for each month, qualify for a coverage exemption, or make a shared responsibility payment (SRP) when filing their Federal income tax return.

The amount of any payment owed takes into account the number of months in a given year an individual is without minimum essential coverage or a coverage exemption from the responsibility to maintain MEC.

MFT 35 Tax Class 2 File Source 1 is the IMF (Individual Master File) MFT for the Individual Shared Responsibility Payment.

FERDI SRP modules with related TDA and/or TDI modules are assigned to normal F inventories.

FERDI stand-alone SRP modules are systemically assigned to F8. If an account becomes a stand-alone SRP account, ACS will systemically generate TOF8,01,SRP ONLY. See IRM 5.19.18.5.8.1 for the definition of stand-alone SRP.

The individual SRP amount owed is not subject to penalties, levies or the filing of a Notice of Federal Tax Lien. However, interest will continue to accrue until the total SRP is paid. The IRS may offset federal tax refunds to the SRP amount until it is paid in full.

Individual SRP (MFT 35) modules are excluded from the Federal Payment Levy Program (FPLP).

All FERDI cases, except those specified in IRM 5.19.18.5(4) above, are assigned to F1 for initial FPLP processing. See IRM 5.19.9.4.3 for an explanation of the FPLP process.

Cases where a FPLP match occurred (TC 971 AC 062) and two FPLP payments have posted (TC 670 with DPC codes 18 or 19) to the account will be reassigned to F2 for systemic monitoring.

Cases where no FPLP match occurred, or a FPLP match occurred but no payments were received, will be systemically blocked from FPLP and reassigned to F5 for manual levy issuance. Before assignment to F5, account modules will be analyzed for Collection Due Process (CDP) notice requirements and the LT11 issued as necessary.

This inventory contains those cases in continuous FPLP levy status that will be full paid within the CSED.

Weekly ACS processing will analyze accounts for the conditions shown below. Any of these conditions will result in systemic reassignment of the case to a manual inventory for appropriate action.

The follow-up date is set each week to the earliest CSED date on any open module.

This inventory contains those cases in continuous FPLP levy status that will not be full paid within the CSED after all non-FPLP levy sources have been exhausted.

The conditions shown in IRM 5.19.18.5.2(2) above will result in systemic reassignment of the case to F4. In addition, cases in F3 are systemically reassigned to F4 with history code TOF4 01,NW SRC when a new levy source becomes available.

This section provides procedures for working cases systemically moved to F4 from F2 and F3.

F5 inventory consists of the following cases:

Cases assigned to F5 for one year where the last action was TOF5 01,ISS LVY or TOF5 52,ISS LVY, and with no subsequent actions for one year will be unblocked for FPLP using TC 972 AC 61 and moved to F1. These cases can be identified by action history code TOF1 01, F5_UNB. This action will occur only once per entity.

Modules systemically moved to F5 are blocked from FPLP. Modules manually moved to F5 are not systemically blocked. Input the FPLP block on manually moved cases as appropriate.

Conduct case analysis by reviewing the ACS history codes to determine next actions as defined below.

If no payments have been received take the following actions:

If we are receiving both FPLP payments and non-FPLP wage/military retired pay payments, and payments will full pay the balance due by the CSED or all levy sources have been exhausted, reassign case TOF3.

Before establishing any continuous wage levy installment agreement, verify that all modules, including those previously reported as currently not collectible, were included on the levy. If not, ensure that all CDP notice and TPC requirements on all assessments for each module have been met and issue the levy. If CDP and/or 180 day notice requirements have not been met, issue an LT11 and reassign case TOF5 with appropriate follow-up date. Document AMS with the levy that needs to be issued when the follow-up date expires.

If non-FPLP only payments are being received, take the appropriate actions per the chart below:

If levy was productive, continue to levy that source. If there are any restricted interest/penalty modules on the account, review the AMS comments to determine if the manual levy process has already been completed.

If all levy sources have been exhausted and the proceeds from the wage levy are less than we would receive from the FPLP, release the wage levy, unblock the FPLP and move the case back to F3.

Cases are manually assigned to this inventory when additional research by a Lead is required, or prior to initiating a currently-not-collectible (CNC) when

Determine if the FERDI indicator can be removed per IRM 5.19.18.2.2. If the taxpayer is no longer a FERDI, apply normal ACS procedures.

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See IRM 5.19.18.5.5.2.1 to determine if military retirement pay was previously subject to FPLP.

Conduct CFOL and Accurint research for potential new taxpayer address and phone number. Make at least one attempt to call the taxpayer at all phone numbers, including any new phone numbers found. Document the contact attempts on AMS.

If the taxpayer contact attempt fails, follow procedures in the table below:

If the aggregate assessed balance is less than or equal to ≡ ≡ ≡ ≡ ≡ use the table below:

If the aggregate assessed balance is greater than ≡ ≡ ≡ ≡ ≡ ≡ conduct Accurint research for real property. Take the appropriate action(s) per the chart below:

The following cases are systemically assigned to F8:

This inventory contains FERDI correspondence cases, MFT 31 mirror assessment cases, and manually monitored installment agreements. See IRM 5.19.1.6.7, Mirroring Accounts and IRM 5.19.1.6.6, Manually Monitored Installment Agreement, MMIA for guidance.

Cases in F9 will be worked by ACS Support employees.

Unless otherwise specified below, leave the case in its current inventory location while working the taxpayer's issues.

The objective is full payment and filing of returns TODAY. Unless otherwise directed in this section, follow normal collection and tiered interview procedures. See IRM 5.19.1-3, ACS Call Flow, for additional information.

Unless otherwise instructed in this IRM, follow procedures in IRM 5.19.13 when securing and verifying financial information. Prior to Currently Not Collectible (CNC) Hardship closing actions, additional financial verification is required for LG$ cases. A full credit report is required on all cases ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ prior to CNC closures. Reassign those cases requiring credit bureau research TOF7,00,CRBUR for resolution.

Verify that the taxpayer (and/or spouse on joint liabilities) is still a federal employee or retiree and document the AMS history with their employing agency or federal retirement source.

If the taxpayer says they are not a federal employee or retiree and you have followed procedures in IRM 5.19.18.2.2 to confirm this, input TC 972 AC 51 to remove the FERDI indicator and follow procedures in IRM 5.19.1 to work the contact.

If the taxpayer qualifies for a Short Term Payment Plan (see IRM 5.19.1.6.3, Short Term Payment Plan Within 180 Days) and agrees to full pay within 180 days, follow procedures in the chart below:

A Notice of Federal Tax Lien will be systemically filed on accounts meeting lien filing criteria when the case moves to F2. If the case is in F1 and the taxpayer has been given an extension to full pay, move the case to F4 to prevent systemic lien filing. If a Notice of Federal Tax Lien has already been filed, leave the case in its current inventory.

If the taxpayer cannot full pay, make IA determination per IRM 5.19.1.6.4.1.

If the taxpayer claims economic hardship do not release any levies until documentation, if required, is received. Follow procedures in IRM 5.19.13.3.3, Asset/Income/Expense Verification and Substantiation, to determine if full or partial release is necessary, then establish IA or CNC as appropriate.

Offers in Compromise (OIC) from federal employees, including IRS employees, are considered; however, due to the sensitivity of issues related to federal employee tax delinquency, public policy implications will be considered in all cases. See IRM 5.19.17.3 for OIC processing procedures. Do not release any levies solely based on the taxpayer's request for an OIC. Follow guidelines in IRM 5.19.4.4.10(5)(g).

If the taxpayer states that they have already filed bankruptcy , but the account is not Status 72, follow procedures in IRM 5.19.1.5.2.1.2. Release all levies, including FPLP, then reassign the case to R4. If the bankruptcy has not yet been filed do not release any levies. Follow procedures in IRM 5.19.1.5.2.1.3. Leave the case in its current inventory location.